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Cash interest explained |
You will receive interest on balances in your platform cash account at the prevailing rate.
Embark Investment Services Limited acts as the custodian for investments on the Willis Owen platform and is one of our strategic partners that provides our Willis Owen ISA, GIA, Junior ISA and SIPP.
Embark places cash with a number of banking partners for safekeeping and to provide the potential for you to earn interest on money in your platform cash account. By managing cash in this way, it aims to provide better protection and a higher overall level of interest than if all funds were placed with a single bank.
The rates of interest paid by banks will vary. Embark retains a portion of the interest earned to cover its costs in managing platform cash.
Current Interest Rate
The table below shows the current customer interest rate payable on cash balances along with the amount of interest retained by Embark. The customer interest rate shown is that after accounting for interest retained by Embark:
| Date From | Customer Interest Rate | Interest retained by Embark |
|---|---|---|
| 25th March 2024 | 2.46% | 1.75% - 2.00% |
Embark can change the rate of interest at any time and it reviews the position at least quarterly. Interest is calculated and accrued daily and is credited to your account on the first of each month. If you transfer out, accrued interest is applied at the point of transfer. We will inform you if and when the interest rate changes as soon as is practicable.
Interest retained
The table below shows the yearly equivalent rates of interest Embark expects to pay based on a range of possible yearly interest rates it may earn.
| Interest Embark expects to earn | Customer Interest Rate | Interest retained by Embark |
|---|---|---|
| 0-1% | 0 – 0.46% | 0 – 0.54% |
| 1-2% | 0.46% – 0.94% | 0.54% – 1.06% |
| 2-3% | 0.94% – 1.46% | 1.06% – 1.54% |
| 3-4% | 1.46% – 2.02% | 1.54% – 1.98% |
| 4-5% | 2.02% – 2.61% | 1.98% – 2.39% |
| 5%+ | 2.61%+ | 2.39%+ |
Historic Interest Rates
To see details of historic customer interest rates, along with the amount of interest retained by Embark, click here.
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An asset class is a broad group of financial assets which have similar characteristics. There are four main types of asset class – cash, shares, property and fixed interest securities (sometimes called ‘bonds’). These main asset classes can be broken down into lower level asset classes. For example, shares can be broken down into UK shares, US shares and so on.
Below we show how the main asset classes can be broken down:
Asset allocation is the process of deciding which type of asset(s) or asset classes you want to hold in your portfolio and the balance in which you want to hold them. It’s an important part of designing a portfolio that matches your risk profile and investment goals. When you are looking at building your portfolio, it is a good idea to have a mix of assets within different asset classes. This helps spread investment risk as asset classes often behave differently depending on economic conditions. For example, while the value of one asset class may be falling, another may be rising to compensate which will reduce the overall impact on the value of your portfolio.
There is no right or wrong answer on the assets you choose and it is dependent on how much risk you are comfortable in taking. Investing in an asset class like shares will have higher risk than putting your money in cash, though there is the potential for greater return. Below, we show the correlation between the risk and potential returns.
A popular way of building a portfolio is to use funds (rather than individual shares). Using funds reduces risk by having exposure to a range of different assets which would be expensive to buy yourself. Funds can offer exposure to areas that are not easy to access by private investors, such as corporate bonds or emerging markets. In the next few articles, we look at what are the characteristics of funds and the different investing styles they can have.
